Cora Gold Ltd (LON: CORA) has announced its upcoming drilling program at Sanankoro in Mali. The goal is to see if inferred resources can be moved to indicated, as well as to see if other inferred resources can be claimed.
All this deserves a little explanation. To go mining, you have to show that there is something worth mining. This should seem obvious, but there are different classifications of what is found. A resource is “we are reasonably sure there is something here” and a caveat is “we have proven there is”. An inferred resource is the land looks like there should be something here, an indicated resource is where there is some level of evidence there is. It’s really a pencil sketch, there are rigid and precise legal distinctions, but it gives an idea of what is going on.
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So, to show that there is something worth mining, a particular mineralization will likely go through the process from inferred to indicated, to reserve, as more evidence of size, quality and the volume of the target material in the mineralization are obtained. Much of the work of a junior mining company is precisely there. Actually, that’s a good description of a young miner, a company doing that. As Cora Gold goes about it, it’s a junior miner – perfectly circular logic.
As for where to go to mine gold, Mali is probably, geologically speaking, a great place. There have been gold mines there for at least a millennium. At one time, the richest man in the world was the local king, based on the production of the gold mines. Access to this gold is also the reason the Portuguese kept trying to sail around Africa rather than waiting for caravans across the Sahara.
Exploration and extraction technologies are advancing. Thus, these old – often alluvial – mines in Mali can be re-examined to see if modern techniques can make them exploitable again. Much of the gold exploration taking place in Mali is exactly of this type. Checking known gold mineralization to see if it is economic again.
This is all, on a logical basis, fine and we’ll have to see what the results are when they arrive.
However, it is rather in the nature of mines that they are located in the country around them and we have slight concerns about the political risk in Mali. As we said about Kodal Minerals, it seems that France is about to withdraw all its armed forces from the country. This will probably increase the risk – the only risk, nothing is certain – of further fighting by Islamic State types in this country. This is a risk that must therefore be monitored beyond the usual risks of junior miners on the mineralizations to which Cobra Gold is subject.